INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

11. INCOME TAXES

The Company did not recognize a tax provision benefit for the years ended December 31, 2021 and 2020.

Following are the components of deferred tax assets, liabilities and allowances at December 31, 2021 and 2020:

	2021			2020
Deferred tax assets arising from:
Capitalized exploration and development costs	$	46,000		$	57,000
Unrecovered promotional and exploratory costs		112,000			112,000
Accrued remediation costs		69,000			68,000
Note payable in gold		-			29,000
Share based compensation		278,000			278,000
Net operating loss carryforwards		13,832,000			13,150,000
Total deferred tax assets		14,337,000			13,694,000
Less valuation allowance		(14,330,000	)		(13,694,000	)
		7,000			-
Deferred tax liabilities arising from:
Note payable in gold		(7,000	)		-
Total deferred tax liabilities		(7,000	)		-
Net deferred tax	$	-		$	-

Management has determined that it is more likely than not that the Company will not realize the benefit of its deferred tax assets. Therefore, a valuation allowance equal to 100% of deferred tax asset has been recognized. The deferred tax assets were calculated based on an effective tax rate of 30% for 2021 and 2020.

At December 31, 2021, the Company had federal and state tax-basis net operating loss carryforwards, prior to giving effect to the probable changes resulting from the IRS audit of the joint venture as described above, totaling $47.1 million and $43.7 million, respectively. Of these net operating losses, $36.6 million will expire in various amounts from 2022 through 2037. Combined federal net operating losses of $10.5 million for the years 2018 through 2021 do not expire, but are limited to 80% of taxable income at the time of usage.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. Management determined that the CARES Act had no impact on the Company.

The differences between the provision (benefit) for federal income taxes and federal income taxes computed using the U.S. statutory tax rate of 21% were as follows:

	2021					2020
Federal income tax expense (benefit) based on statutory rate	$	(472,000	)	21.0	%	$	(455,000	)	21.0	%
State income tax expense (benefit), net of federal taxes		(196,000	)	8.7	%		(190,000	)	8.7	%
Revision of NOL estimates, state apportionment factors and state effective tax rates		32,000		(1.4	)%		2,000		(0.1	)%
Increase (decrease) in valuation allowance		636,000		(28.3	)%		643,000		(29.6	)%
Total taxes on income (loss)	$	-		-	%	$	-		-	%

The Company has assessed its tax positions other than the NOL issue above and has determined that it has taken no uncertain tax position that is probable to give rise to an unrecognized tax liability. In the event that the Company is assessed penalties and/or interest, penalties would be charged to other operating expense and interest would be charged to interest expense.

The Company files federal income tax returns in the United States only. Tax attributes, mainly net operating losses after 2014, may be adjusted as a result of a completed audit of 2015, 2016 and 2017, as described above. The Company is no longer subject to federal income tax examination by tax authorities for years before 2018.